So we see growth as the optimal strategy and we can consistently deliver margin expansion through that growth. And – but we’re also focused on managing the middle of the P&L. We want our people to get better and better every day at managing food costs, labor costs and direct expenses. So we give them tools and technology to go ahead and manage the middle of the P&L more and more effectively as well. So as inflation moderates, managing that middle of the P&L gets easier as well. So it’s not just about pricing, it’s about managing that cost structure at the same time. So but we think growth is the primary driver and will continue to be the strategy of the company.
Andrew Wittmann: Great. And then just one quickly here for Tom. I just looked at the share count. It looks like you guys are estimating a 270 million share outstanding number here for fiscal ‘24. In the quarter you just reported you’re at 263 that was up about a million shares, about 3 million to 4 million shares year-over-year. It seems like the number of share increase is unusually high this year, is there a lot of shares vesting here that were – that were coming here to vest in the first quarter or something or what’s driving the somewhat larger share count creep?
Tom Ondrof: Yes, two components to that. One, there’s – there’s roughly usually about 3 million of normal dilution as we go year-to-year. And then secondly you’ve got the sort of rebasing of – of the remain co-employee share options and restricted shares from the spin. So, because of the math in essence of the spin it’s about a $7 million total, $4 million related to spin and $3 million just as normal – more normal dilution.
Andrew Wittmann: Okay. That makes sense. Thank you.
Tom Ondrof: Sure.
Operator: Our next question comes from Toni Kaplan with Morgan Stanley. Your line is open.
Toni Kaplan: Thanks very much. I wanted to talk about new business. It’s been very strong for the past couple of years now. I just wanted to ask if you could sort of compare and you alluded to it a little bit in the first question asked previously, but just could you talk about the sales force a little bit more if you compare the number of sales people you have now versus when you started, has that gone up meaningfully? Has it been just increases in productivity that has been, accelerating this new business, as it been the technology or the decentralization? Just anything that sort of talks to the sustainability of this accelerated new business going forward?
John Zillmer: Sure. It’s actually all of those things. First of all, as you may remember as we joined the company, we went ahead and made significant investments in sales infrastructure in a couple of different ways. First by adding sales resources to the streets and that level has been now constant probably for the last three or four years. We made the initial investment as we joined the company. We made some changes in sales, leadership, and we down streamed the sales function back to the business unit. So it’s now sitting in the geography closest to the customers and that way it’s much closer to where the job needs to get done. And so we invested in those resources back three years ago and the level of reinvestment we’ve made over time has been essentially de minimis, sales manager here or sales person there dependent upon business unit strategy.
So there hasn’t been a quantum change since our initial reinvestment in that business. So what you’ve seen over the last three years has been enhanced productivity and increasing sales volume for each sales manager based on their time and territory, based on their time back in the business which was really our strategy to begin with. We wanted people to be working in the lines of business, in the territories that they were responsible for and that led to significant ramp up of their productivity. So, we don’t see the need for continued reinvestment. We think we’re at a steady state in terms of the number of resources that we have. We’re always – we’re always looking to optimize and we may add a person here or there depending on the total opportunity set, but in general we feel like we’re in very good shape from a sales structure perspective.
Tom, I don’t know if you have anything you want to add to that.
Tom Ondrof: Yes. No, I think the only thing I’d add is that time and territory is so important and that just we’ll continue to build strength in the sales force as they work their – their pipeline in a territory for multiple years in a row because as we’ve talked about a lot, how low to contract in this – in our business can vary anywhere from a few months to many years. And so our stability in the workforce which is still three years young in terms of this close to over 40% increase from fiscal ‘19 and before is still getting their sea legs and still developing that stability in their market. So I think it will close rates and productivity will continue to improve.
Toni Kaplan: Great and international had a very strong quarter of growth again. Wanted to ask if there was anything that really has been driving the improvement there and how you see that going into 2024 with regard to sustainability of growth in international?
John Zillmer: Yes, I would say yes they had another terrific year in terms of net new growth consistently across all geographies and I think that is driven in large part by the stability that Tom just described. The international sales organization was largely intact and in place before we rejoined the company. So that organization has been more stable and they’ve been working those territories more consistently over a longer period of time. So I think that – that’s worked to their advantage. I think it’s also very helpful that we have a very disciplined and focused strategy with respect to growth in those geographies where we really want to be and so we’re consistently focused on those markets and consistently focused on those businesses.
And we’re not – we’re not out planting flags in new countries. We’re really focused on those geographies where we have the right to win and a competitive advantage and that’s translated into continued performance improvement. So yes, we feel very good about the international team and their productivity and we’ve been the beneficiary of significant stability in those markets.
